European stocks advance, euro falls after ECB meeting

ECB leaves key rates unchanged

LONDON (MarketWatch)—European stocks climbed Thursday after the European Central Bank held key interest rates unchanged, while the euro weakened largely in the wake of a strong jobs report from the U.S.

The Stoxx Europe 600 index
SXXP, -0.52%
ended up 0.9% at 348.91, a third win in a row.

The European Central Bank left its main lending, or refi, rate unchanged at 0.15%, as expected, and made no changes to other key rates. The bank also left its deposit rate unchanged at negative 0.10% after last month lowering it into negative territory for the first time. The ECB in June launched measures aimed at boosting low levels of inflation and spurring stronger economic growth.

“We’ve had a lot of momentum behind the markets over the course of recent weeks heading into a meeting when everybody knows [ECB President Mario] Draghi isn't going to announce any kind of monetary tightening,” Commerzbank economist Peter Dixon said in an interview Thursday.

Ahead of the ECB rate statement, data released Thursday showed a June slowdown in business activity in the euro zone, though activity in Italy logged the fastest pace of growth in more than three years.

Among equities, Ingenico SA
ING, -0.44%
put in the best performance on the Stoxx 600, leaping 9.5% as the French payment terminals maker agreed to purchase GlobalCollect, an online payment provider, for €820 million ($1.12 million).

But Balfour Beatty PLC shares
BBY, +0.10%
took a 4.5% hit after the company warned of “further worsening” in the mechanical and electrical engineering part of its U.K. construction business. That unit will see a £35 million profit shortfall, the company said, but added that overall group pretax profit expectations for 2014 remain unchanged at £145 million to £160 million.

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